A Number Like 10 to the 12th Power

By William Davis

In the world of big mathematics, “googol” was conceived as a way to represent the large number 10 100, or 10 to the 100th power.

In decimal notation, a googol is written as the digit 1 followed by one hundred zeroes (a million, don’t forget, has six).

Interestingly enough, the term was coined a hundred years ago by the nephew of U.S. mathematician Edward Kasner — a nine- year-old kid named Milton – for his uncle’s book.

Today, googol’s special significance is its use as a point of comparison for unimaginably large numbers, like the totality of subatomic particles in the visible universe or the number of ways a few nerds in a garage can make and not make money over their lifetimes.

We’re well acquainted, of course, with Milton’s word, or at least the way it sounds. Story goes that “Google” was an accidental misspelling of “googol” by the two Stanford PhD students who founded the now-ubiquitous company back in 1996. Smartly enough, the spelling-challenged boys, Larry Page and Sergey Brin, picked the name to signify that their new search engine could provide outrageously large quantities of information. In 2004, Kasner’s family members, who had inherited the rights to his googol-concept book, considered suing Google for its use of the term. For any number of reasons, no suit was ever filed.

An inconvenient choice for the Kasners perhaps, since Google, in very short order, helped lead a broad tech boom that made it one of a handful of giant companies central in people’s daily lives…and their investment portfolios. Today, tech firms make up five of the 10 most valuable American companies in the U.S., and three not named Apple – Amazon, Microsoft, and of course Google – have market values exceeding $800 billion. Together with Facebook, this subgroup of Big Tech names collectively accounts for nearly 15% of the total value of the S&P 500. The last time tech companies held anywhere near such outsized sway was 1999. That year, America Online, lifted by its inconceivably large number of subscribers, was the country’s 10th most valuable business.

Jobs left Apple in 1985 to launch NeXT, a computer platform development company, which he ultimately merged with Apple in 1997. He was largely responsible for helping revive his former company, which was teetering on bankruptcy and trading for less than a dollar a share.

It’s said that past isn’t always prologue, but there’s no denying the technology landscape keeps shifting in ways that can humble even the most powerful players. (Ask Alexa about IBM.) And, oh yeah, Apple’s market cap touched $1 trillion last week. You may have seen it on your Macintosh TV.

What too-big-to-fail bankers are saying…

“I think (10-year Treasury yields) should be 4 percent today. You better be prepared to deal with
rates 5 percent or higher – it’s a higher probability than most people think.”

— Jamie Dimon, JPMorgan Chase & Co. chief executive officer

What the numbers are saying…
— 23.5%

The estimated rise in profits at S&P 500 companies in the three months through June, more
than 2½ times revenue growth in the same period

— Issi Romem, chief economist at construction-data firm BuildZoom, on how the loss ofyoung workers in construction has meant fewer homes have been built.

What the facts are saying…

The S&P 500 has risen for four consecutive months. The last 11 times the index rose from
April to July it gained an average of 10.5% in the final five months of the year.

53% of large cap equity managers outperformed their benchmarks in July, though the
underperformers did worse than the outperformers did well.

With more than half of S&P 500 firms reporting earnings for the second quarter, per-share
profits are tracking three percentage points higher than analyst forecasts.

What folks really on the Street are saying…

As the oil-and-gas business becomes more like manufacturing and less like wildcatting, what
made Exxon special is fading. That premium it earned over the decades will keep fading, too.”

— Heard on the Street’s Spencer Jakab

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